Travel demand has bounced back faster than expected this year, airlines said Tuesday, a welcome trend for an industry battered by Covid and a sign that carriers will be able to pass along higher fuel prices and other costs to customers.
U.S. jet fuel prices last week spiked to their highest level since 2008 after Russia’s invasion of Ukraine, which sparked worries about scarcer crude supplies as countries sanctioned the oil producer. Though jet fuel prices have eased, they’re still up 35% so far this year.
Delta Air Lines said it expects revenue to make up for “more than 100%” of the jump in fuel prices during the second quarter. The Atlanta-based carrier reiterated that bookings said bookings are outpacing 2019. President Glen Hauenstein said at a JP Morgan investor conference that the airline last week had its highest one-day cash sales in its history.
Ahead of an investor presentation Delta said it expects first-quarter sales to come in at 78% of 2019 levels, up from a forecast in January for a recovery of as little as 72% of 2019 levels.
Airlines have been comparing revenue and capacity to 2019 to show how much they have recovered since before the pandemic.
United Airlines said it expects first-quarter revenue to “be near the better end” of guidance for a 75% to 80% recovery from three years earlier.
Shares of the carriers were up 8% apiece in morning trading.
“System bookings for future travel have improved close to 40 points since the first week of 2022 and business traffic has increased more than 30 points since the peak of the Omicron impact in January 2022,” United said in a filing.
American Airlines said it expects first-quarter revenue to be off 17% from 2019, better than its January forecast for a two-year drop of as much as 22%. American was up more than 8%.
Southwest Airlines raised its revenue outlook to as much as 92% recovered from 2019 levels. Shares were trading 7% higher in morning trading.
